Increasing online and mobile interactions have triggered a rise in cybercrime, affecting countries, municipalities, businesses, and individuals. Cybercriminals are constantly adapting their methods, spurring a global increase in demand for advanced technology and actionable intelligence provided by firms like Cognyte Software (NASDAQ:CGNT). CGNT stock is up almost 63% in the past year. The recent post-earnings sell-off in the stock seems overdone, presenting investors with a window of opportunity to invest in Cognyte and capitalize on the surge in cybercrime.
While the company’s Q4 results exceeded expectations, its full-year guidance for FY2025 indicated a loss of $0.13 per share at the midpoint of the revenue outlook.
Cognyte’s Tools to Fight Cybercrime
Cognyte provides investigative analytics software to national security, law enforcement, national intelligence, and other security organizations.
The company has extended its capabilities into GenAI and cryptocurrency. Its decision intelligence platform enables authorities to construct a picture of suspects, organizations, companies, and financial accounts involved in illicit activities, allowing authorities to limit the ability of organized criminal groups to fund their operations.
CGNT’s Recent Results and Outlook
Cognyte recently reported Q4 and FY2024 financial results. Its revenue of $83.69 million for the quarter exceeded estimates, while EPS of -$0.23 beat expectations of -$0.27. The company reported $314 million in revenue for the year, an increase of approximately 11% over the preceding year.
For FY 2025, management projects approximately 8.5% revenue growth, estimated to hit around $340 million. The company also forecast a diluted loss per share of $0.13.
Cognyte boasts a robust financial position, with a solid cash balance of $83.3 million and no outstanding debts. It also has an extended credit facility of $65 million available until January 2026 to fund future growth.
What Is the Stock Price Forecast for CGNT?
While CGNT stock has been trending up over the past year, the post-earnings pullback of roughly 20% has the stock trading toward the middle of its 52-week price range of $4.00-$8.53. The current level appears to be relatively undervalued, given the stock’s P/S ratio of 1.5x compared to the Information Technology sector average of 2.9x.
Analysts following the company have been cautiously optimistic about Cognyte stock, increasing price targets while maintaining neutral ratings. For instance, Evercore ISI analyst Kirk Materne recently raised the price target on CGNT shares to $7.50 from $5.00, while maintaining a Hold rating. He noted that the market’s reaction was out of step with the recent positive earnings and future outlook.
Cognyte is rated a Hold based on three analyst recommendations issued in the past three months. The average price target for CGNT stock is $7.75, which represents a 15.16% upside from current levels.
Bottom Line on CGNT
Market demand is surging for cutting-edge technology and actionable intelligence to combat cybercrime, and Cognyte is well-positioned to capitalize on this need. Despite the recent sell-off, the company’s near-term outlook and solid financial position suggest it is poised for further growth. Cognyte appears attractively valued and could offer investors a compelling opportunity in the cybersecurity sector.
